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Eurozone Publications

Below is a list of our Eurozone Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

Please use the filters on the right to search for a specific date or topic.

March

17 Aug 2022 Eurozone Monitor The EZ will Not Steer Clear of Recession, Even if Imports Fall

The EZ goods trade deficit widened again at the end of Q2 as imports rose and exports fell.

Imports should fall soon, but exports are also likely to soften as GDP growth in key trade partners slows.

Net trade will not prevent the incoming recession, exacerbating the impact from falling consumption.

Claus Vistesen (Chief Eurozone Economist)Eurozone

12 Aug 2022 EZ Monitor The ECB will Flexibly Reinvest PEPP Redemptions through H2

We think the ECB will continue to buy peripheral bonds using redemptions from core countries...

...This should, we think, mean that the TPI can remain in the shadows this year.

We still believe the ECB will hike by 100bp more this year; the bund 2s10s will invert in Q1-23.

Claus Vistesen (Chief Eurozone Economist)Eurozone

9 Aug 2022 EZ Monitor Are the Largest EZ Economies Already Rationing Energy

We now think it’s likely that the EU manages to fill its gas storage levels to the target 80% by November.

Storage will be drained more this winter than in the past, given lower flows, even assuming no cold snap.

This is despite rationing, which we doubt can be avoided, and will push the EZ into recession by Q4.

Melanie Debono (Senior Eurozone Economist)Eurozone

29 July 2022 EZ Monitor German core HICP inflation is still rising; it will peak in September

HICP core inflation in Germany rose further in July; it will peak in September, at just under 4%.

Energy inflation in Germany is now falling, but upside risks in gas and electricity are still substantial.

ESI sank in July, adding to the evidence of a significant slowdown in the EZ economy.

Claus Vistesen (Chief Eurozone Economist)Eurozone

21 July 2022 EZ Monitor Europe remains exposed to a quick end to Russian gas flows

Russian gas will soon flow to Europe again, but at a severely reduced rate; a full shutdown remains likely.

The IMF estimates that Europe will be short some 50bcm gas if Russian supplies are halted, at best.

Only demand compression, via higher prices and or rationing, solves this problem; it will sting.

Claus Vistesen (Chief Eurozone Economist)Eurozone

6 July 2022 How Much Flexibility Does the ECB Have on PEPP Reinvestments?

The ECB did not use its entire PEPP envelope and diverged from the capital key also in the APP.

Reinvestments will be used flexibly to cap spreads; rumours suggest cross-country purchases started.

Our estimates point to a maximum of €10B worth of PEPP reinvestments for BTPs; that’s not enough.

Melanie Debono (Senior Eurozone Economist)Eurozone

24 June 2022 Winter is Coming and the Eurozone Economy isn't Ready

The details of the June PMIs are not pretty; we are more convinced the EZ is entering a slowdown.

We now think the EZ will be unable to avoid entering a technical recession in Q4.

This will set a weak base for next year; we forecast just 1% GDP growth in the EZ in 2023.

Melanie Debono (Senior Eurozone Economist)Eurozone

17 June 2022 The SNB will Not Hike as Quickly as the ECB, CHF will Weaken

The SNB threw a bazooka yesterday, hiking interest rates and doing a U-turn on its approach to the CHF.

As a result, the franc saw its biggest intra-day jump vs. the euro since the Frankenshock of 2015.

We look for the Bank to hike rates again at each of this year’s two remaining meetings, before pausing.

Melanie Debono (Senior Eurozone Economist)Eurozone

15 June 2022 What Degree of Fragmentation is Too Much for the ECB?

We think the ECB’s pain threshold for BTP spreads is 300-to-350bp, much higher than in the past.

An explicit commitment to an active use of PEPP reinvestments is the most likely initial response.

BTP spreads will rise further in the near term, but Italian 10-year bonds are attractive in their own right

Claus Vistesen (Chief Eurozone Economist)Eurozone

13 June 2022 The Devil is in the Detail in the Detailed Q1 EZ GDP Data

The Irish boost to EZ GDP growth in Q1 will have a reverse impact on growth in the second quarter.

We now expect EZ GDP growth of 0.4% quarter-on-quarter in Q2, 0.1pp lower than previously.

The risks to our forecast for a weak H2 are to the up-side, especially if the gas embargo remains elusive.

Claus Vistesen (Chief Eurozone Economist)Eurozone

10 June 2022 The ECB will Lift Rates by 150bp Between Now and February

The ECB will lift its deposit rate by 25bp in July, and follow up with a 50bp hike in September.

Beyond September, we now pencil-in three 25bp hikes; in October, December and February.

The bloodbath in Italian bond markets will soon be a problem for the ECB; new tools are needed.

Claus Vistesen (Chief Eurozone Economist)Eurozone

8 June 2022 Manufacturing will Weigh on Q2 GDP Growth in Germany

Industrial production in Germany rebounded in April, but a fall in Q2 as a whole is virtually guaranteed.

Rebounds in services and net trade should drive a Q2 increase in German GDP, by around 0.5%.

We think German GDP will rise by 1.4% and 1.7% in 2022 and 2023, respectively, below the consensus.

Claus Vistesen (Chief Eurozone Economist)Eurozone

6 June 2022 Look Closely, and the Data Point to Early Signs of Weakness in the EZ

A rebound in services activity is supporting EZ GDP growth; we see softness everywhere else.

We still see EZ GDP rising by 0.5% quarter-on- quarter in Q2, before a sharp slowdown in H2.

Unemployment in the euro area is still falling, but at a slowing rate; this trend will continue in H2.

Claus Vistesen (Chief Eurozone Economist)Eurozone

1 June 2022 We Now Think the ECB's Deposit Rate will be at Zero in July

The EU finally agrees on a Russian oil embargo, but pipeline oil to Eastern Europe will keep flowing.

We now see a real risk of panic at the ECB; the deposit rate will be at zero by July.

Revised data show that Italy’s economy actually grew in Q1 while Swiss GDP beat expectations.

Claus Vistesen (Chief Eurozone Economist)Eurozone

26 May 2022 The Near-Term Uncertainty over German GDP Growth is Rising

Volatility in inventories and net exports has thrown near-term German GDP forecasts into disarray.

We’re sticking with our assumption of 1.5% growth in 2022, which includes a technical recession in H2.

Market forecasts for German growth will fall further, but we could well have to lift ours too.

Claus Vistesen (Chief Eurozone Economist)Eurozone

23 May 2022 The EZ's Current Account is in the Red, for the First Time since 2012

The EZ’s current account plunged to a deficit at the end of Q1, and it will likely stay there in Q2.

EZ portfolio outflows are plunging, reflecting rising economic uncertainty and market volatility.

Construction in the euro area performed solidly in Q1, but it will slow sharply in Q2.

Claus Vistesen (Chief Eurozone Economist)Eurozone

17 May 2022 What is Happening to the EU Ban on Russian Oil Imports

EZ trade data show that sanctions hit trade with Russia hard, and energy imports fell in March.

Progress in imposing an oil ban has stalled, as four countries, led by Hungary, threaten to veto it...

...The risk to our assumption that the EU will push ahead with a ban on gas soon, is towards no ban.

Melanie Debono (Senior Eurozone Economist)Eurozone

16 May 2022 Is it Safe for Investors to Start Buying Eurozone Equities?

The medium-term outlook for EZ equities has improved significantly in the past 12 months...

...But earnings expectations have to fall further in the near term, weighing on prices over the summer.

EZ manufacturing will slow sharply in Q2; core inflation pressures in France have intensified.

Claus Vistesen (Chief Eurozone Economist)Eurozone

11 May 2022 If the EU Bans Russian Gas, Italy will Flirt with Recession in H2

Italy will probably avoid entering a technical recession in Q2, as services activity rebounds strongly...

...But we now expect an EU ban on gas imports from Russia, which will weigh on growth in H2.

Our forecasts for Spain are unchanged from March as recent developments offset each other.

Melanie Debono (Senior Eurozone Economist)Eurozone

10 May Germany will Enter Recession in the Second Half of the Year

We still think German GDP growth will pick up a bit in Q2, as services activity improves.

But the economy probably will fall into recession in the second half of the year.

We now see full-year growth in 2022 at just 1.5-to-1.6%, with the same pace likely in 2023.

Claus Vistesen (Chief Eurozone Economist)Eurozone

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